Graduate School

I have been thinking a lot about graduate school lately. I've applied to a handful of schools and have several  others that I will apply to if necessary. I'm seeking a masters in economics. Right now, I'm playing the waiting game as schools process my applications materials and make the final judgment.

Greg Mankiw blogged recently about graduate education in the field of economics. He suggests an expansion of master of economics programs, and I completely agree. Tyler Cowen has also posted some crowd-sourced rankings for economics departments across the world. When reading economics rankings, I am always left thinking "What about the masters programs!?". There are no rankings out there for terminal masters degrees in economics, and it has been sufficiently frustrating.

Some Economists see a masters degree as the easy way out, and it may be for people who enroll in a Ph.D. program and dropout early. However, there are others (myself included) who would rather spend more time in the workforce earning income and think a masters degree will prepare them just as well as a Ph.D. to be successful in their endeavors.

The King's Speech

The King's Speech is a must-see movie, although, I'll have to admit that I did not expect it to be for whatever reason. It turned out to be a captivating look at the reluctance of King George VI to take the throne due to a speech impediment and fear of public speaking. During this personal yet quite public ordeal, a special connection is developed between the soon-to-be king and his quirky speech therapist. I can not do the film justice, so check out reviews at Metacritic and the trailer below.

Here are a few more links about the movie...
Slashfilm.com - The Making of the King' Speech
Interview with Colin Firth
Interview with Colin Firth and Geoffrey Rush

The King's Speech is not a movie that has to be seen in the theater. Personally, I would enjoy this movie just as much (if not more) in my living room paying only a dollar to rent it from redbox. However, a copy may be hard to by as it should be in high demand.

US Higher Education: Is it the Best in the World and How Can We Improve it?

The United States outsources billions of dollars worth of business to China, India, and other developing countries every year (e.g. solar energy). However, China is also "outsourcing." The culprit? Higher education. China outsourced the higher education of 127,000 Chinese students to the United States alone in the past year. On the flip side of that, the US has only sent 14,000 students to study at Chinese universities in the past year. These stats and the graphic below via The Economist.

The Economist (Jan 18th, 2011)

Is the US Higher Education System the Best in the World?
China is obviously not the only country sending a lot of their university students to the US. Our country has a global comparative advantage in higher education at this point in history. I think most people would agree. Perhaps the UK is nipping at our heels, but given their relative geographic size and population, there is no way that they can ever support a University system as robust as ours.

THE World University Rankings (Sept 16th, 2010)

For more info on these rankings and the global higher education picture, click here.

How Can We Improve the System? 
Given that domestic industry and manufacturing will continue to chase cheap labor abroad, the United States must continue to invest in the University Economy to build human and intellectual capital. However, it needs to develop a more efficient, faster, and cheaper method of allocating funds. In my opinion, the federal grant system appears to be outdated. So why is this important?

Federal research dollars account for roughly 50% to 75% of our universities' total research funding each year, if not more in some cases. Aggregate federal research at the university level in 2007 was over $30 billion. It is smart to allocate a lot of money towards university research only if allocated to the right places. And let's face it, government is not always the best mechanism for allocating funds. A market based system could do much better, but designing one that would work is a significant challenge. Perhaps, we can ask the foreign students to figure it out for us...

MLK Day - Segregation Statistics

Fifty-five years after the Brown decision, blacks and Latinos in American schools are more segregated than they have been in more than four decades.

This is from a report by Gary Orfield of The Civil Rights Project titled "Reviving the Goal of an Integrated Society." I find this extremely worrisome, especially since this trend could continue to worsen in the future. More from Dana Goldstein:

American schools are more segregated by race and class today than they were on the day Martin Luther King, Jr. was killed, 43 years ago. The average white child in America attends a school that is 77 percent white, and where just 32 percent of the student body lives in poverty. The average black child attends a school that is 59 percent poor but only 29 percent white. The typical Latino kid is similarly segregated; his school is 57 percent poor and 27 percent white.
Overall, a third of all black and Latino children sit every day in classrooms that are 90 to 100 percent black and Latino.

If we truly want to achieve integration and diversity of race in our schools, this will require policy changes at various levels. For example, I know that Title 1 funds are well-intentioned. Schools with a higher percentage of poor children are given more funding to provide "additional academic support and learning opportunities to help low-achieving children master challenging curricula and meet state standards in core academic subjects." While I understand this logic, it does not account for the fact that there may be diminishing marginal returns on each dollar spent as a student population becomes increasingly disadvantaged. Also, the department of education seems to be providing a financial incentive for schools to increase their amount of low income students. Are there any financial incentives out there for schools that strive to attract students of different races and cultures? I have never heard of any.

I would be interested to see a study that shows if Title 1 funds have led to more segregation in our schools. I would also like to see the impact of Title 1 funds on student achievement. Please share if you are aware of any research on these topics.

Nuclear Finance?

Check out this interesting piece by Financial Times columnist Tim Harford that draws a parallel between nuclear power plants and the financial system. The main thesis of the article:

A series of measures intended to guarantee the safety of individual financial institutions had brought the system to its knees.

And more...

[T]he safety system introduced what an engineer would call a new “failure mode” – in other words, a new way for things to go wrong. And that was precisely the problem in the financial crisis.

I hope that Fed Chairman Ben Bernanke reads this unique perspective on the financial meltdown and the inevitable future crises to come.

My New Reading List

I am really excited about the books that I received this year for Christmas. I have lots of good reading material for the new year.

Economics
The Wealth of Nations by Adam Smith
Naked Economics  by Charles Wheelan
Soccernomics by Simon Kuper and Stefan Szymanski

Other
The Next 100 Years by George Friedman
The Business of Value Investing by Sham Gad
The Best American Sports Writing 2010 edited by Peter Gammons
Eating Well's Healthy in a Hurry Cookbook

I was also surprised by my wonderful girlfriend who gave me an Amazon Kindle, the top selling eReader. I am in the process of learning how to use my new gadget, but you can expect a post about it in the coming weeks.

Merry Christmas!

Merry Christmas and happy holidays! I hope everyone is able to enjoy this special time of year with their loved ones.

Economic Hardship - The Ozarks and Winter's Bone

When people are facing economic adversity, what choices do they have? One option, is to turn to family and friends for help. But what happens when an entire community is struggling?

I was forced to think about these questions and others when I watched the Sundance Film Festival Best Picture Winter's Bone. It is based on the book by Daniel Woodrell written in 2006. The film tells the story of a community in the Ozarks by focusing on one particular family. Sadly, some residents of the community have turned to cooking crank (methamphetamine) to earn a quick profit.

After seeing the movie, and listening to this NPR interview with the book's author, I am really interested in learning more about the history of the Ozark region and how people there have dealt with economic hardship. Although the book is fictional, it is inspired by events that the author has experienced while living in the Ozarks. I have only listened to excerpts, but I do plan on reading Winter's Bone the novel. The character descriptions from the interview are captivating. Here is an eerie description about one of the main characters, Uncle Teardrop:

"Uncle Teardrop was Jessup's elder and had been a crank chef longer, but he'd had a lab go wrong and it had eaten the left ear off his head and burned a savage, melted scar down his neck to the middle of his back. There wasn't enough ear nub remaining to hang sunglasses on. The hair around the ear was gone, too, and the scar on his neck showed above his collar.

Three blue teardrops done in jailhouse ink fell in a row from the corner of the eye on his scarred side. Folks said the teardrops meant he three times done grizzly prison deeds that needed doing, but didn't need to be gabbed about. They said the teardrops told you everything you had to know about the man, and the lost ear just repeated it. He generally tried to sit with his melted side to the wall."

You can hear author Daniel Woodrell read this description at 3:20 in the interview. If you have seen the movie or read the book, I would love to hear your thoughts.

Measuring Teacher Quality Series

This month I will be writing a blog series on teacher quality. I will share my own insights from teaching, current economic research on the topic, and more. Look for the first post in the series during the next few days.

For now, I will leave you with this...

1 Year of Free Amazon Prime For Students

With any student email address, you can sign up for an entire year of FREE Amazon Prime for students. The main benefit with this promotion is free two-day shipping with no minimum order quantity.

I already had an account with Amazon.com, but I had to set up a new one for the promotion to work. It is worth the extra few minutes if you plan on doing any shopping on Amazon this year.

Feel free to share any of your own holiday shopping tips, websites, or ideas in the comments section below.